Where consumers plan to cut spending as high inflation persists

If inflation continues, more than 50% of adults say they will cut restaurant spending and consider cutting it further, according to the CNBC + Acorns Invest in You survey, conducted by Momentive.

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“The pace of price increases has moderated, but not as much as expected,” Greg McBride, chief financial analyst at Bankrate, said in a note. “Excluding a drop in energy prices – which seems outdated at this point – the increases remain broad-based.

“With the annual rate dropping from 8.5% to 8.3%, it might be tempting to say we’ve seen the peak, but we’ve also been rigged before, as was the case last August.”

If price pressure continues, more than 50% of adults say they will cut back on restaurant spending and consider cutting it further, according to the CNBC + Acorns Invest in You survey, conducted by Momentive. The online survey of nearly 4,000 adults was conducted on March 23-24.

People are also reducing driving and subscriptions and some are canceling vacations, the survey found.

“It’s amazing,” said Tania Brown, an Atlanta-based certified financial planner and founder of FinanciallyConfidentMom.com.

Rising prices on the mind

Although headline inflation was not so high in April, there was some bad news. The reading was higher than expected, and core inflation, which excludes volatile food and energy prices, was also higher than expected.

This means that many Americans are now spending more on essentials, which is tightening their budget without any change in their habits. People notice these hikes and pay more attention to them. Nearly half of all adults said they think about rising prices all the time, while 55% of those with annual household incomes of $50,000 or less constantly check costs, according to the CNBC investigation.

“Keeping your eyes on your spending is always a good strategy,” said Susan Greenhalgh, a certified financial advisor who runs Mind Your Money in Hope, Rhode Island. “You really can’t figure out what’s going on with your money unless you really look at it and measure it.”

Keeping track of what you’re spending can also help you figure out where you can cut back, she said, because inflation hits everyone differently. If you’re someone who doesn’t eat out a lot but gets crushed by gas prices at the pump, cutting back on driving will likely help your budget more than skipping a few dinners out.

It’s also important to monitor and compare your spending from month to month because prices are rising so quickly. You may need to adjust more frequently than in the past.

“Goal No. 1 is, no matter what, to protect the necessities of food, shelter, basic transportation and basic medical care,” Brown said.

How to fight inflation

Inflation could continue to rise, further compressing budgets. More than 75% of adults said they fear rising prices will force them to rethink their financial choices, the survey found.

The impact will be hardest on those with the lowest incomes who could be pushed into survival mode, Brown said. For those struggling to cut spending even further, she also advised reaching out to creditors and lenders to see if you can defer payments.

Some people may also be eligible for utility bill assistance programs, which could help cover monthly costs, Brown said. It may also be time to dip into emergency savings to cover your essential expenses, if you need them, she added.

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Those with higher incomes will also have to adjust, especially if they want to continue saving at the same rate as before inflation, Greenhalgh said.

Of course, if your budget is too tight, it may be necessary to reduce your savings to avoid going into debt. If so, Brown and Greenhalgh suggest setting aside small amounts regularly to maintain the habit of saving.

“As long as you take things in the right direction, it’s great,” Brown said.

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Disclosure: NBCUniversal and Comcast Ventures are investors in tassels.

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